On 22 November 2017 five Japanese producers of car safety equipment (i.e. car seatbelts, airbags and steering wheels) were fined a total of EUR 34 million by the European Commission for their involvement in one or more of four cartels.[1] Interestingly, the cartels took place outside the EU, i.e. in Japan, but they did affect the European customers. The case is a good example of the extraterritorial application of the EU competition rules and jurisdiction of the European Commission, as well as leniency and cartel settlement procedure in action.

Extraterritoriality of EU competition rules

The companies Tokai Rika, Takata, Autoliv, Toyoda Gosei and Marutaka colluded by way of coordinating prices, exchanging sensitive information for the supply of the car safety equipment to Japanese car manufacturers, such as Toyota, Suzuki and Honda in the EU.

The cartels (meetings at the suppliers’ premises, in restaurant and hotels, as well as email exchanges) took place in Japan. But since “around one out of 11 cars sold in Europe is produced by a Japanese company”, as well as the fact that those companies affected by the cartel have manufacturing facilities in the EU, the cartel was considered as significantly affecting the European customers.

Settlement procedure

Tokai Rika, Takata, Autoliv, Toyoda Gosei and Marutaka admitted their involvement in the violation of the EU antitrust rules and agreed to settle the case (to benefit from reductions of fines for their cooperation with the European Commission in the course of the investigation. The European Commission in this case did apply a reduction of 10% to the fines).

Some companies received full immunity from fines under the leniency procedure: Takata – for revealing three cartels (thereby avoiding an aggregate fine of EUR 74 million); and Tokai Rika – for revealing one of the cartels (thereby avoiding an aggregate fine of EUR 15 million).

The timing of cooperation and the extent to which the evidence the companies provided helped the competition authority to prove the existence of the cartels in which they were involved are always among the crucial factors in determining the amount of fines for the cartel participants.

FYI

This decision is part of numerous cartel investigations into the automotive parts sector. Previously the European Commission fined the suppliers of automotive bearings, wire harnesses, car seats flexible foam, parking heaters in cars and trucks, air conditioning and engine cooling systems and lighting systems. “Today’s decision brings the total amount of Commission fines for cartels in this sector to €1.6 billion”.[2]

For more information: info@actecon.com

[1] (i) sales of seatbelts to Toyota, (ii) sales of airbags to Toyota,(iii) sales of seatbelts to Suzuki, and (iv) sales of seatbelts, airbags and steering wheels to Honda.

Source of the image: https://www.google.com.tr/search?q=seat+belt+airbag+free+photo&tbm=isch&tbs=rimg:CQIBqbN0RNpWIjiJz-YLd-LnPGlHybQMIUTDFXHcMYwcYK6eIsQK5IFK1mvE7Bqr-cbyqupDD7hjOn-b2-lkXt9RiyoSCYnP5gt34uc8ETvAPTJ4H2OwKhIJaUfJtAwhRMMR5YJ9gKyfRxYqEgkVcdwxjBxgrhHHbSvVWFqn3CoSCZ4ixArkgUrWEcnw17y7ov29KhIJa8TsGqv5xvIRlGtXNQZDi_1UqEgmq6kMPuGM6fxFlJAN5DKlUjyoSCZvb6WRe31GLEd3Db4LsPGhU&tbo=u&sa=X&ved=0ahUKEwif-bPDrN7XAhVC6qQKHeQTBhcQ9C8IHw&biw=1366&bih=662&dpr=1#imgrc=c_uq5Pw8VGpwSM: